Valuation reports – what do they look like?

Valuation reports will typically be comprehensive but easy to understand. The format will depend on the type of engagement, so for example. a valuation report would typically include:

Glossary of relevant valuation terms and appropriate rules and standards followed

Engagement & instruction details, purpose of engagement and scope, definition of value and why, key assumptions, information relied upon (contained in appendix), statement of independence and duties to the court

Description of the business, business ownership structure and what is being valued (eg. equity or the business)

Analysis of financial information for the last 5 years and analysis of current financial & forecast information, consideration of the accounting policies applied and sources of financial information, eg. audited?

Consideration and description of any non business and non recurring income and expenses

Consideration and description of appropriate valuation approaches and explanation for the method chosen

Consideration and description of any relevant market date, eg. relevant transactions or comparable company data

Where relevant, the application of a Discount for Lack of Control and the rationale and support for the discount applied

Where relevant, the application of a Discount for Lack of Marketabilty and the explanation and support for the discount applied

Where relevant, consideration and description of any surplus assets and liabilities

Valuation calculation and explanation

Any methods used as a cross check, eg. rules of thumb

Consideration of the value applicable to intangible assets, including goodwill